JP Morgan Chase Merger Case Study

8152 Words Feb 15th, 2009 33 Pages
Abstract
Mergers and acquisitions have become the most frequently used methods of growth for companies in the twenty first century. They present a company with a potentially larger market share and open it up to a more diversified market. A merger is considered to be successful, if it increases the acquiring firm’s value; most mergers have actually been known to benefit both competition and consumers by allowing firms operate more efficiently. However, it has to be noted that some mergers and acquisitions have the capacity to decrease competition in various ways. The merger between JP Morgan Chase and Bank One presented JP Morgan Chase with the opportunity to expand its perspective through providing the firm with access to retail banking
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This is a great example of the strong controls that the United States government has instituted, in order to prevent companies from forming monopolies, so that our financial markets will stay unpolluted and healthy competition can continue to thrive. It also shows that the topic of mergers is extremely controversial at times and involves a great number of legal aspects in order for any merger to become finalized. Most mergers have actually been known to benefit both competition and consumers by allowing firms to operate more efficiently. However, it has to be noted that some mergers and acquisitions have the capacity to decrease competition. This is very dangerous for both us, the consumers, and the companies on the market, because declines in competition may cause higher prices, decreased availability of goods or services, products of lower quality, as well as declines in innovation. This is mainly due to some companies merging and creating a more concentrated market, with fewer suppliers, which leads to fewer options for the consumers, and thus gives some companies the advantage of raising prices since the consumers have no other choice of suppliers. This is even more crucial to realize in the case of companies which produce

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